AMD shares spike due to rumours that Microsoft will buy it

Just ahead of the weekend the rumours concerning Microsoft's interest in buying AMD were rekindled. Fudzilla published an exclusive, based up information from its industry sources, claiming "Microsoft is seriously talking to AMD about buying the chipmaker".

I'm not sure at exactly what time Fudzilla published its story, but as you can see from the share price graph, above, AMD's share price started to climb at a rapid pace at about 2.30pm US Eastern time. It climbed about 15 per cent in 20 minutes, and then it settled down and stabilised to close just over 9 per cent up on the day. At the time of writing the US markets are closed with AMD shares worth $2.01. AMD's 52 week low was $1.61, at the end of July, and its high was $4.11 – that was exactly a year ago.

Apparently Microsoft and AMD have been "in talks for a while," but the sources weren't clear about when/if anything will happen or will be announced. Fudzilla ponders whether Microsoft could benefit from controlling the development of future Xbox chips and make its own GPUs to get the best from DirectX 12. Then, when Zen-based CPUs and APUs appear, these processors could become the natural choice of processor for the Surface range.

Later on in the Fudzilla report, the rumour smoke clouds turn into, an even less distinct, haze. The site says that AMD's recent formation of the Radeon Technology Group "could mean that the company might be acquired in pieces". Then we are told that "our well informed industry sources suggest that Intel is interested in the acquisition of AMD".

AMD's market value, according to its current share price and number of shares in issue, is $1.57 billion.

I'm sure we've heard (or maybe suggested?) this one before. MS are trying to compete with Apple in the phone/tablet space. Acquiring Nokia got them control in one, AMD might help with the other. Of course, they might be after ARM…

On the console front, it would make perfect sense.. Microsoft would be winning from PS4 and Wii sales too. The US authorities also don't like foreign buyers of US firms, so I didn't believe the Samsung potentially buying AMD story a while ago.